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What the numbers say: The value of Ukraine's agricultural exports to the European Union (EU) saw a major jump last year and more than doubled from 2020 to 2022. The sharpest increase occurred after Brussels lifted tariff duties on Ukrainian products in a bid to support Ukraine's economy following Russia's invasion of the country. Relevance: Russia's invasion raised concerns over global food supplies due to its impact on Ukrainian agricultural exports. Russia and Ukraine collectively generated about 30% of the world's wheat exports prior to the invasion. The jump in Ukraine's EU exports shows that the removal of tariffs helped Ukraine to continue selling its agricultural produce despite the war. However, the decision also allowed cheap exports to flood the European market. Polish farmers have called for tariffs on Ukrainian products to be reintroduced to support local farmers. The country's agriculture minister recently resigned over the issue. Brands that should care: Companies in the food and drink industry should work to identify and reduce their exposure to the market distortions caused by cheap Ukrainian grain. Logistics firms operating in Europe should also prepare for a sharp reduction in shipments from Ukraine when the EU's extension of the tariff waiver expires. |
